NEW DELHI: Realty major DLF reduced its employee strength by 1,100, or about 30 per cent, during 2012-13 after outsourcing its construction and facility management activities.

DLF had 2,600 employees on its rolls at the end of 2012-13, compared with 3,700 employees at the end of 2011-12, according to the company's latest annual report.

The 1,100 employees have not been laid-off but have been redeployed to the outsourcing firms, a company official said.

"...it (DLF) has successfully outsourced the project execution/management and facility management. In addition, outsourcing of some of the accounting functions is also under way," DLF said in the annual report.

The company said its objective is to nurture and harness core management teams and explore outsourcing that would enhance management bandwidth and focus.

The country's largest realty firm outsourced construction for its current and upcoming projects to contractors such as Larsen and Toubro to avoid delays. Facility management has been given to property consultants such as Cushman & Wakefield and Jones Lang LaSalle.

In a message to shareholders, DLF Chairman K P Singh said the real estate sector faces various challenges, including the absence of a long-term funding mechanism, prevalence of the Urban Land Ceiling Regulations Act in some states, lower floor area ratio in cities, high stamp duties and problems in land acquisition.

"These sector specific challenges became more glaring in the context of an increasingly fragile economic scenario last year and the sector's extended underperformance," he said.

He highlighted that real estate is not only a key economic sector in terms of its direct GDP contribution, it is also an important employment generator because of its forward and backward linkages with about 300 other sub-sectors.

"The company continued to steadfastly implement its strategy to focus on its core business of real estate development and leasing, launch of select residential and commercial projects in targeted geographies...divestiture of non-core assets and reduction in debt," Singh said.